Gambling Webhosting and Licensing

Wednesday, 13 March 2013

Guide to a successful start up gambling enterprise, our own experience

Thinking of starting your own gambling business? Here is a story from an old hand, someone who has been through the mill and come out the other side a little battered a little bruised and a little wiser.

When the bubble burst, the real people got going:
I had a great idea in 2000/1 for a gambling business. It sounded like easy money, shooting fish in a barrel so to say. The problem was, I had no cash... not a dime. But I had big dreams, ambitions of owning the world (or a small dictatorship at the very least) and so I set about putting the 11 year path in place that I have walked down and now look back upon with the hope that I can help others starting out on this path.

Since I had no money, nor the skills to properly write the software I needed, I hatched a plan to get what I wanted at my budget of zero.

I called lawyers and financial experts to get an opinion on my business model. They all said it would not work, could not work, was illegal, and that I should not bother or that I needed to register with XYC department, and apply for XYZ form etc. If you ever need discouragement when starting a business ask an accountant or lawyer, they are designed to be pessimistic.

It all sounded like hard work and they were getting me down, so I dumped them like a fat girl at the prom.

I need three things:
1. Software
2. Processing
3. Marketing

For software I got a friend to partner with me. For the processing, I got a "money guy" and his son (who owned a casino) and seemed like a good match for an affiliate marketing relationship. We agreed to split the business three ways.

So I set about designing on paper how the software would work and worked night and day with my friend to build the business.

After 6 months our software neared completion and as it did the money guy got more and more excited and his dreams on the return of his (zero investment at that point in time) reached legendary proportions. Of course I had given the money guy and his son all the documentation and the outline of the project, how it needed to work and our progress etc. They used this information to build their own version of the business, behind my back.

He was a crafty fellow, he slowly inflated how much money he would need to spend for companies and marketing (radio/tv/bill boards/neon signs/firework displays) and legal work etc. and since I had no money, my share would need to be reduced for his increased risk. But I should not worry because we were going to make so much money, my 2.5% share (wtf) would earn me more than I had ever dreamed of. Finally, he and his son made an offer of $4000 USD for me/coder to walk away from the project. When we refused, he had no option but to drop the bomb that they had their own software and that I was the foreskin in the local synagog.

I never knew such people existed, those that believe ingenuity, vision, determination, tenacity, foresight, hard work, late nights working for nothing can be purchased at cents on the dollar. People who are so greedy that they would sell their own mother or father for a pretty penny. It was this experience that has made me keep my integrity in business, always to offer a fair deal, and to respect other peoples ideas and to help in situations where I am genuinely interested...

So over night my job title went from project manager and ex 33% partner recently reduced to 2.5% then 0%, to CEO/CFO of the future "taking over of the world" gambling enterprise as a 50% partner with my best friend, comrade and coding genius and with a simple philosophy in hand: "A business starts with its first customer, now lets go and find him or her".

Although we did not have a company, bank accounts, any documentation to help us pass any form of modern day verification, funds to fund elaborate advertising campaigns, licensing, secretaries, accountants and lawyers I still managed to find a company to take me at face value and offer processing and pay to our personal bank account.

As soon as we got a merchant account (it was an aggregated account), we were in business and since we had no management companies to pay, no company structures to fund, no lawyers, no accountants, no licenses etc. our business expenses were essentially a $10 shared hosting account in the US and the promise to $400 per month for energy input (if we had it) to keep us alive, we broke even after 15 days thanks to some lucky domain registrations which opened up a doorway to a stedy flow of new customers.

The business thrived and over time we were able to put in place formal structures (but only when we could afford to). And the moral of the story is simply keep your costs to a minimum. Had we started any other way, I am not sure where we would be today.

While I can not recommend the approach that we took 11 years ago as the best way to start your business, what I can recommend is the following:

1. Keep your hosting and technical expenses to a minimum, pay only for what you need right now and not what you "may need" down the line. Our cloud hosting service has been designed for the start-up so take advantage of it. Shared accounts are $29.95 and the cloud server is $99.

2. If you host alone, you are going to need to pay someone to manage your hosting environment. If you use our cloud, for the $29.95 or $99 you pay each month, this is a significant discount on the salary you would otherwise have to pay.

3. Bandwidth is expensive in Curacao. If you host alone and run a high bandwidth business, best you have investors with deep pockets. If you host with us, we can plug you into our content distribution network (CDN) and reduce your bandwidth costs significantly. NOTE: We can offer CDN to customers who do not host with us as well.

4. Trust companies in Curacao are expensive. hourly rates are anything from $200 - $450 USD per hour. It is a thriving business here and for the start up, an expensive ongoing expense. But like all businesses their is competition between vendors, so negotiate your rates or a fixed yearly fee. Also bear in mind that the local company has to approve all invoices, be available to approve wire transfers, submit tax returns etc. So this can be costly (but no different to other jurisdictions). Also make sure you are working in USD and not EUR. Depending on your business, this can amount to $10K + per annum (don't let anyone fool you that it will be less).

4. Licensing costs vary, get in touch to find out what you should be paying. Some licensing providers charge a premium.

CuracaoWebhosting.com offers affordable gambling hosting and casino hosting from Curacao. We are based in ECP (the islands premier data center) and host a variety of local and international casino company websites.

We work with BitCoin as well as fiat based casinos and would advise you to host your casino in a reliable offshore jurisdiction.